In a small country, the effect of a given change in government spending
A) on output is large and the effect on the trade balance is small.
B) on output is large and the effect on the trade balance is large.
C) on output is small and the effect on the trade balance is small.
D) on output is small and the effect on the trade balance is large.
D
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Markets may not work well due to
a. lack of factor mobility b. high degree of monopoly c. weak legal infrastructure d. government regulation e. all of the above
The problem of moral hazard has led
A) the governments of many developing countries to guarantee repayment of all loans. B) to higher growth rates in Latin America. C) to excessively speculative investment. D) to both privilege and responsibility of creditors. E) to stable investments with small and steady expected gains.